Only 1 in 5 Consumers Globally Feel That Brands Are Open and Honest. Why Does That Matter?

Brands are facing an “authenticity deficit,” according to a new report from Cohn & Wolfe, which finds just 22% of consumers surveyed around the world agreeing that brands and companies today are open and honest. While brands fared worst on that measure, they didn’t do much better on others: for example, just 1 in 4 respondents agree that brands can be trusted.

Likewise, only 1 in 4 feel that brands make the world a better place, and slightly fewer (23%) agree that they uphold high values.

The “authenticity deficit” described appears to exist across the world, based on the survey of 12,000 consumers across 14 markets, though it varies relatively widely across countries. The most positive countries are China and Indonesia, but only 36% and 35% of respondents there, respectively, feel that brands are open and honest. The most negative country, meanwhile, is Sweden, where just 5% agree. The US is right around the global average, with 23% feeling that brands are open and honest.

The importance of authenticity has been outlined in several pieces of research:

Indeed, the latest Cohn & Wolfe study finds 88% of consumers worldwide saying they would reward a brand for its authenticity. Most commonly, consumers would recommend the brand to others (52%), remain loyal to the brand (49%) and value the brand (48%), though a brand’s authenticity would also attract 1 in 5 to want to work for the company or to invest in it.

So how to define authenticity? According to the study, authenticity depends on how much consumers perceive a brand to be:

Real: communicating honestly; being genuine and real, not artificial; and acting with integrity.

These attributes are important as they relate to how consumers experience the brand, as opposed to attributes such as purposefulness and responsibility, which are attributes that consumers must learn. In fact, the study found that how a brand directly treats the consumer (69%) is more important to respondents than its clarity about its beliefs (59%) and how it treats the planet (55%).

In ranking the most authentic brands (from a base of about 1600), Cohn & Wolfe note that brands performed better on the “reliable” and “respectful” dimensions of authenticity than on their perceptions of being “real.” Of course, the top brands delivered above-average scores on each of those dimensions. As for those top brands? The top 10 are:

Disney;

BMW;

Microsoft;

Amazon;

Apple;

Intel;

Audi;

Samsung;

Adidas; and

Lego.

Finally, on an industry basis, the automotive sector scored highest, fueled by scores on the “reliable” and “respectful” clusters and in particular on the individual attributes of “high quality” and “treats customer well.” Auto was closely followed by technology, which performed well in each of the authenticity clusters, and particularly strongly in the individual traits of “high quality,” “protects customer data,” and “communicates honestly.” Of note, however, the financial industry out-performed the technology industry in terms of customer data protection, with this supported by other research finding that customers are most trusting of financial institutions to protect their data.

The industries that are least authentic? The telecommunications industry, and just above it, the health industry. Both had trouble with the “real” authenticity cluster, particularly with communicating honestly and being seen as genuine and real, not artificial.

About the Data: Cohn & Wolfe describes its methodology in part as follows:

“Building on the past insights from our three annual reports, we have compiled – for the first time – the Authentic 100, a list of the highest ranking brands in the world, based on consumer perception of authenticity. We surveyed 12,000 consumers in 14 markets on more than 1,600 brands. Research was conducted in Brazil, China, France, Germany, India, Indonesia, Italy, Hong Kong, Singapore, Spain, Sweden, United Arab Emirates, the United Kingdom and the United States from September through October 2015.”